Motorists can expect a welcome sight at the gas pumps, as mid-month data from the Central Energy Fund (CEF) signals impending price reductions across the board.
Currently, petrol prices indicate an excess of about 62 cents per liter, while diesel is poised for even more substantial cuts, ranging between 74 and 77 cents per liter.
Anticipated prices:
Petrol 93: a decrease of 63 cents per litre
Petrol 95: a decrease of 61 cents per litre
Diesel 0.05% (wholesale): a decrease of 74 cents per litre
Diesel 0.005% (wholesale): a decrease of 77 cents per litre
Illuminating paraffin: a decrease of 69 cents per litre
LP Gas data isn't provided in daily snapshots by the CEF.
The Department of Mineral Resources and Energy (DMRE) stressed that its daily snapshots lack predictive accuracy and may not cover all potential adjustments, such as slate levy alterations or retail margin changes.
These adjustments, based on a number of factors, are typically finalised at the end of each month.
The primary factors influencing domestic fuel costs are the rand/dollar exchange rate and international oil prices.
In South Africa, fuel prices are recalibrated on the first Wednesday of each month, reflecting these two variables.
Monday saw the rand slipping below the R18.35/$ mark, marking its strongest performance since mid-January. This uptick in strength was buoyed by renewed optimism surrounding potential rate cuts in the US, alongside diminishing election apprehensions and robust commodity prices.
According to Annabel Bishop, chief economist at Investec, the rand is stabilizing around these elevated levels, as the perceived political risk of a national ANC-EFF coalition diminishes.
Concerns about the ANC forming an alliance with the EFF post the upcoming national election have been a drag on local markets since the year began. However, recent opinion polls have assuaged these worries.
Moreover, Bloomberg noted that since late April, non-residents have been net purchasers of domestic bonds. In April alone, foreign investors acquired a net R3 billion worth of South African bonds, a notable shift after being net sellers in February and March.
A tighter market vied with decreased geopolitical risks to keep oil prices locked in a narrow band at around $82 per barrel.
The Organisation of the Petroleum Exporting Countries stuck to its forecast for relatively strong growth in global oil demand in 2024 and said there was a chance the world economy could do better than expected this year.
OPEC's monthly report said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.
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